Supply Chain Management Kalakota: pp
What is a supply chain? The network of retailers, distributors, transporters, storage facilities and suppliers that participate in the sale, delivery and production of a particular product
What is supply chain management? The coordination of processes involved in producing, shipping and distributing products.
Players in a supply chain
Components of a supply chain There are three dimensions:
Components of a supply chain (cont) Material flows Physical products from suppliers to customers
Components of a supply chain (cont) Information flows Demand forecasts Order transmissions Delivery reports
Components of a supply chain (cont) Financial flows Credit card information Credit terms Payment schedules
What do SCM software applications do? Integrate demand prediction, inventory stocking and transportation decisions Focus on managing tasks rather than costs Ensure timely delivery of raw materials required for production and the finished product
Trends in SCM World wide dispersion of manufacturing and distribution facilities The demand for customized products for local markets has increased
Trends in SCM (cont) Channel unpredictability Firms must work with multiple suppliers to ensure reliability of raw material supply
Trends in SCM (cont) Responsiveness over efficiency Companies have to change the way that they manage their inventory because of customized delivery schedules Customers Products NOW!
Trends in SCM (cont) Acceptance of lower margins for greater market share Companies are re-designing supply chains to eliminate waste and inefficiencies.
SCM and Integration The ultimate aim of SCM is integration This will involve eliminating the middle man (The direct focus approach used by Dell computers eliminates the need for retailers) Customers – Manufacturers – Suppliers should be seamlessly integrated
Some e-Supply strategies Make – to - stock (Starbucks) Based on Vertically integrated supply chain Continuous replenishment (CVS pharmacy – Mckesson demand chain) Based on tight integration of wholesaler and manufacturer Build-to-Order (Intel, Solectron, Micro) Real time matching of supply to demand.
CVS pharmacy – Mckesson
Intel, Solectron, Micro
Elements of Supply Chain Management software applications
Order commitment Allows vendors to accurately quote delivery dates to customers Provides customers the ability to “see” the progress of deliveries
Advanced Scheduling These modules provide real-time updates to delivery schedules based on changing conditions Allows players along the supply chain to view and modify delivery schedules.
Demand Planning modules Consolidate demand forecasts from all business units in a corporation Support the use of statistical tools and business forecasting techniques
Distribution Planning Creates operating plans for a company’s logistic managers Provides a complete model of the supply chain Can address customer requirements in some cases
Transportation planning Monitors transport operations to ensure Raw materials and finished products are delivered on time Can analyze factors such as loading capacity of vehicles, vehicle availability and vehicle location
Customer Functions
Entering Purchase Orders
Vendor Functions
Entering Vendor Orders
Products Screen
Warehouse Functions
Shipping Processing
Reporting Functions
Creating a Sales Report
Journal Question - 5 Supply Chain Management and Customer Relations Management systems have considerable overlap. Discuss some of the challenges that businesses face in integrating these two types of applications? 3 challenges